Technology startups may have a more difficult time luring seasoned executives to top posts, a new survey indicates, as candidates increasingly opt for stability and cash over the traditional dotcom trademarks of risky ventures and stock options.
The survey, released by international recruiting firm Korn/Ferry International, signals executives increasingly “risk adverse” nature given the recent economic slowdown and dotcom demise.
“It will be a challenging time for startups to get experienced candidates,” said Lisa Behlmann, Korn/Ferry’s regional market leader for technology in Europe.
In a recent survey of over 300 executive recruiters, Korn/Ferry said that 84 per cent of those surveyed said that they believe candidates prefer more stable “blue chip” companies as opposed to smaller firms with high growth.
This could be bad news for technology startups, which are usually considered to have high growth potential but are not necessarily seen as stable.
Additionally, the survey found that 27 per cent of the recruiters polled said that candidates desired a higher salary base and less equity and cash. This too could bring sour tidings to tech startups given that many dotcoms have in the past relied on the promise of stock options to attract candidates when they didn’t have the cash on hand to pay hefty salaries.
“Candidates are now looking for something vastly different than before the burst of the dotcom bubble when they were offered stock options,” Behlmann said. “It’s back to the fundamentals.”
The fundamentals imply strong compensation packages, a well-funded company with assurances from investors and the chance to build something, Behlmann said.
With candidates demanding these fundamentals, companies’ executive searches have become a bit more challenging. In fact, 70 per cent of those polled by Korn/Ferry said that they believe that it was “significantly harder” or “somewhat harder” to lure candidates to new positions.
“Candidates’ first impulse is to stay put where they are safe,” Behlmann added.